Products from organic producer, AUGA group, will be marketed at Costco, one of the world’s largest retailers.
The company’s subsidiary company has signed agreement with „Costco Wholesale Canada Ltd“. Buyers in Canada will be able to purchase AUGA organic soup. First order is the biggest order in ready-to-eat products category received by AUGA group for export markets to date.
“We met Costco representatives at an exhibition in Chicago last year. Negotiations lasted less than a year. This is a very short time, as for many manufacturers, it usually takes 2-3 years to reach Costco warehouses. Having international quality and production control certificates and audits, helped speed up the process. However, formal documentation was not enough to enter Costco stores. During the final stage of negotiations, Costco representatives tasted the soups for themselves and chose their favorites. We signed a regular supply agreement and are executing the first order. We will see the real annual sales volume after receiving further orders”, – says Laurynas Miskinis, Head of Organic Products R&D and Commerce of AUGA group.
According to available information, AUGA is currently the only Lithuanian brand in Costco.
Costco has more than 700 stores worldwide, of which nearly 100 are located in Canada. Most of the stores are located in the United States – over 500. Although the number of Costco stores is not very big, it is one of the largest retailers in the world in terms of turnover, which in the past fiscal year, amounted to 129 billion USD. One Costco store on average generates more than 160 million USD sales per year.
Costco also has a significant market share in Mexico, the United Kingdom, Japan, Taiwan, South Korea, Australia and several EU countries.
After entering the Canadian market, it will be much easier to access other major markets, such as the United States, in the future. Partnering with Costco proves that the company meets the highest quality standards and can provide a regular supply of sufficient production volume.
“This retailer dedicates a lot of attention to organic products, as Canada is one of the most important organic markets. In Canada, an entire shopping basket of basic goods can be selected from organic products. Entering such market is a very big achievement for us”, – says Mr. Miskinis.
Costco operates differently from traditional retail stores. Costco customers purchase an annual membership which gives them the right to shop at low prices. According to recent data, Costco has over 90 million loyal customers worldwide.
The stores in this network often do not have a very wide range of products, but they are of high quality and sold in large quantities as multipacks. AUGA soups will also be sold in packages of five.
About 80% of the AUGA group’s products are currently sold abroad. Half of all sales are end-consumer products.
One of the most important markets is Japan where AUGA brand organic products are distributed by one of the biggest distributor of organic and natural food in Japan MUSO.
In the UK, AUGA products are distributed by the country’s largest organic products wholesaler, Tree of Life, and sold in Planet Organic and Whole Foods Market stores.